CREATING A CLIMATE RESILIENT AMERICA: STRENGTHENING THE U.S. FINANCIAL SYSTEM AND EXPANDING ECONOMIC OPPORTUNITY HEARING BEFORE THE SELECT COMMITTEE ON THE CLIMATE CRISIS HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS SECOND SESSION HEARING HELD OCTOBER 1, 2020 Serial No. 116–19 ( www.govinfo.gov Printed for the use of the Select Committee on the Climate Crisis U.S. GOVERNMENT PUBLISHING OFFICE 42–185 WASHINGTON : 2020 VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS SELECT COMMITTEE ON THE CLIMATE CRISIS ONE HUNDRED SIXTEENTH CONGRESS KATHY CASTOR, Florida, Chair BEN RAY LUJA´ N, New Mexico GARRET GRAVES, Louisiana, SUZANNE BONAMICI, Oregon Ranking Member JULIA BROWNLEY, Calfornia MORGAN GRIFFITH, Virginia JARED HUFFMAN, California GARY PALMER, Alabama A. DONALD MCEACHIN, Virginia BUDDY CARTER, Georgia MIKE LEVIN, California CAROL MILLER, West Virginia SEAN CASTEN, Illinois KELLY ARMSTRONG, North Dakota JOE NEGUSE, Colorado ANA UNRUH COHEN, Majority Staff Director MARTY HALL, Minority Staff Director climatecrisis.house.gov (II) VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS C O N T E N T S STATEMENTS OF MEMBERS OF CONGRESS Page Hon. Kathy Castor, a Representative in Congress from the State of Florida, and Chair, Select Committee on the Climate Crisis: Opening Statement ........................................................................................... 1 Prepared Statement ......................................................................................... 3 Hon. Garret Graves, a Representative in Congress from the State of Lou- isiana, and Ranking Member, Select Committee on the Climate Crisis: Opening Statement ........................................................................................... 4 WITNESS: PANEL 1 Hon. Rostin Behnam, Commissioner, Commodity Futures Trading Commis- sion Oral Statement ................................................................................................. 5 Prepared Statement ......................................................................................... 8 WITNESSES: PANEL 2 Joanna Syroka, Senior Underwriter and Director of New Markets, Fermat Capital Management, LLC Oral Statement ................................................................................................. 30 Prepared Statement ......................................................................................... 32 Rich Powell, Executive Director, ClearPath Oral Statement ................................................................................................. 35 Prepared Statement ......................................................................................... 36 Maggie Monast, Director of Working Lands, Environmental Defense Fund Oral Statement ................................................................................................. 42 Prepared Statement ......................................................................................... 44 APPENDIX Questions for the Record from Hon. Kathy Castor to Hon. Rostin Behnam ...... 64 Questions for the Record from Hon. Kathy Castor to Joanna Syroka ................ 66 Questions for the Record from Hon. Kathy Castor to Maggie Monast ................ 69 (III) VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS CREATING A CLIMATE RESILIENT AMERICA: STRENGTHENING THE U.S. FINANCIAL SYSTEM AND EXPANDING ECONOMIC OPPORTUNITY THURSDAY, OCTOBER 1, 2020 HOUSE OF REPRESENTATIVES, SELECT COMMITTEE ON THE CLIMATE CRISIS, Washington, DC. The committee met, pursuant to call, at 1:31 p.m., via Webex, Hon. Kathy Castor [chairwoman of the committee] presiding. Present: Representatives Castor, Bonamici, Brownley, Huffman, Levin, Casten, Graves, Palmer, Carter, and Miller. Ms. CASTOR. The committee will come to order. Without objection, the chair is authorized to declare a recess of the committee at any time. Good afternoon, and thank you all for joining this remote hear- ing. As a reminder, members participating in a hearing remotely should be visible on the camera throughout the hearing. As with in-person meetings, members are responsible for control- ling their own microphones. Members can be muted by staff only to avoid inadvertent background noises. In addition, statements, documents, or motions must be submit- ted to the electronic repository at [email protected]. Finally, members and witnesses experiencing technical problems should inform committee staff immediately if that happens. I now recognize myself for 5 minutes for an opening statement. Well, whether it is extreme heat, intense flooding, stronger storms, or relentless wildfires, the climate crisis continues to pose a severe threat to America’s economy and the pocketbooks of all Americans. Year after year, we have seen how climate change hurts busi- nesses, it strains resources across the nation, and it harms work- ers. And we have seen the impact it has on budgets of local govern- ments, who don’t always have the resources to recover from wors- ening disasters, and on the budget of the U.S. government, as we are forced to provide greater amounts of disaster aid in the wake of calamity. The risks and harm of climate change are hurting families, farm- ers, small business owners, as well as workers in manufacturing and the energy sector. The changing climate is especially harming working-class households and people of color, the same folks who have been historically marginalized through discriminatory prac- tices and underinvestment. (1) VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00005 Fmt 6633 Sfmt 6602 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS 2 It is also putting financial institutions at risk. Just last month, the Commodity Futures Trading Commission issued a landmark report describing these risks and giving lawmakers and financial regulators actionable recommendations on how to mitigate the growing risks. Climate change is affecting insurance markets, and it is making lending costlier. It is making it harder for frontline communities to afford the protection and peace of mind that they deserve. And it is hurting farmers and agricultural workers. The writing is on the wall. Financial markets, federal regulators, and business leaders recognize the risks posed by climate change, but they are also publicly optimistic about the opportunities to solve the climate crisis, by directing capital towards climate-smart investments and making our economy more resilient and stronger than ever. Just today, 55 international financial institutions, including U.S.- based MetLife and Amalgamated Bank, released a framework for setting specific climate goals for mortgages, bonds, and other asset classes in their portfolios. Our workers, our financial institutions, and our small businesses are looking to Congress now for solutions. So, as we find ways to bounce back from the harm done by COVID–19, we must build back our economy so that it is better and stronger than ever. And it starts by investing in long-term solutions—lasting solutions that will protect workers, strengthen our financial systems, and ensure economic growth. These solutions are climate solutions. Investing in a resilient clean energy economy will put Americans back to work through millions of good-paying, life-sustaining jobs. It will strengthen the middle class and provide justice for Black and Brown Americans. And it will make our financial institutions stronger and more resil- ient. By bringing transparency to climate-related risks, we will be able to build a 21st-century economy that withstands the test of time. Climate solutions give us a chance to rebuild our economy and our infrastructure, making them stronger, more resilient, more ground- ed in environmental justice. We can create the jobs of the future, at a time when our nation desperately needs them. But we have to act with urgency, and we have to follow the science. States and local communities are already leading the way. For example, California has created a special task force on climate risk and insurance, while cities in my own state of Florida have formed regional climate compacts to pool resources and knowledge. And, along the Mississippi River, communities have come together to ad- dress flood and drought risks that threaten farmers. They are find- ing innovative solutions in collaboration with insurers, catastrophe risk modelers, and investors. So now Congress must step up. We must enact policies that give communities the tools and resources they need. We must ensure their access to climate data so that they can make informed deci- sions. We must help them overcome barriers to private investment in climate resilience and protect investors from hidden sources of climate risks. VerDate Sep 11 2014 00:50 Dec 03, 2020 Jkt 042185 PO 00000 Frm 00006 Fmt 6633 Sfmt 6602 E:\HR\NSET\42185.XXX 42185 ralbany on LAP520R082PROD with HEARINGS 3 The science is in, the risks are clear, and the incredible opportu- nities for progress are within our reach. It is up to us what to do next. I yield back. And now I recognize